DEAR MR. MYERS: There is a company in our area that is running TV advertisements claiming their agents can close a real estate sale or a refinancing loan via video or a webcam instead of the customer having to physically go to the bank or escrow company to get it notarized and finalize the deal. Is this legit, or some sort of scam?
ANSWER: It’s legitimate, but only if the transaction is made in one of the 15 states that recently agreed to allow it.
Until recently, home buyers had to physically appear before a closing attorney or escrow officer to sign all the paperwork needed to close a real estate transaction and to have everything notarized. But now, a nationwide title company called Notarize and Title Resources has obtained permission from the 15 states – stretching from Hawaii to New York and New Jersey – to have all of the documents notarized by use of a webcam. That’s a huge convenience, especially for those who live far from the new home that they are purchasing.
Buyers and refinancers should ask their real estate agent or lending representative if they qualify for this innovative new service. However, it’s important to note that although 15 states now allow it, not every county within those states is currently equipped to accommodate the practice. Again, the agent or lender should know the answer.
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REAL ESTATE TRIVIA: The average American home seller spends $18,342 in closing costs, according to a joint study by real estate research firm Zillow and Thumbtack, an online company that matches agents with sellers and buyers. That figure includes a typical sales commission of 6 percent of the home’s value.
DEAR MR. MYERS: Our daughter is in college. We pay $400 each month toward the off-campus apartment that she rents with another student. Can we deduct this cost on our next federal tax return as an “educational expense”?
ANSWER: Sorry, but no. Though your daughter obviously needs to live somewhere, the cost isn’t deductible because the apartment is primarily utilized for sleeping, eating, studying or other personal use. Older renters can’t deduct their rental payments, so the Internal Revenue Service won’t let younger people – or their benefactors – take them either.
Get a free copy of IRS Publication 970, Tax Benefits for Education, by calling the agency at 800-829-3676 or by downloading it from irs.gov. Consult an accountant or similar tax professional for more details.
DEAR MR. MYERS: My wife has dementia. When I tried to refinance our home to help pay for her growing medical bills, the bank turned me down because her name is on the title to our house, and said her worsening mental condition makes her legally incapable of signing documents. I showed the lender the health and financial powers of attorney that she signed for me years ago, when she still had all of her mental faculties, but the bank refused them. What can I do?
ANSWER: There’s no legitimate reason why the bank should refuse the loan. The two powers of attorney were signed when she still had all of her mental faculties intact, so they’re perfectly valid.
Call the bank again and demand to speak to a supervisor. If worse comes to worst, you’ll need to have an attorney make the call or have the lawyer write a letter. Solving this mess may take some time, but you’ll eventually get it done.
David W. Myers’ column is distributed by Cowles Syndicate Inc.